A proposed regulation would change the Canadian import valuation rules and could result in higher duties. Comments on this proposal are due by June 26.

The Canada Border Services Agency’s proposed change to the Value for Duty Regulations would eliminate the current rules regarding what constitutes a sale for export. Instead, this regulation would establish that the relevant sale for export is the “last sale” in the case of multiple sales, irrespective of whether the person in the last sale is the importer of the goods. 

In other words, contrary to current rules, this regulation would allow a subsequent domestic sale to be considered the relevant sale for export, and any applicable customs duties would be based on this higher value. This change would negate current court rulings identifying the relevant sale for export as the one in which title is passed to the importer of the goods.

The CBSA has claimed that this change is needed to ensure that Canadian importers that compete with non-resident importers are not disadvantaged by the current regulatory framework. However, while the proposed regulation may indeed increase dutiable import values for non-resident importers, there does not appear to be anything in the regulation that would limit it to them. Accordingly, it appears that resident importers with multiple sales could experience higher dutiable import values as well.

The proposed regulations can be found here.

For more information on this proposal and how it may impact your business, please contact Larry James at (613) 882-7190 or via email.

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